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Hexcel (HXL) Q3 Earnings Match Estimates, Revenues Miss
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Hexcel Corporation (HXL - Free Report) reported third-quarter 2018 adjusted earnings of 80 cents per share, which came in line with the Zacks Consensus Estimate. The bottom line improved 12.7% from the prior-year quarter’s figure of 71 cents.
In the reported quarter, the company’s GAAP earnings came in at 91 cents compared with the year-ago quarter’s figure of 76 cents.
Total Revenues
The company’s net sales totaled $540.5 million, which missed the Zacks Consensus Estimate of $544 million by 0.6%. However, the top line witnessed an increase of 10% from the year-ago quarter’s figure of $491.5 million.
Operational Update
Hexcel's gross margin was 26.5% in the third quarter, reflecting a contraction of 110 basis points year over year.
The company’s operating expenses amounted to $46.5 million in the quarter, which came in line with the year-ago quarter’s operating expenses. Selling, general and administrative expenses were down by 6%, while research and technology expenses were up 17.8 %.
Quarterly Performance
Commercial Aerospace: Net sales were up 5.8% year over year to $373.1 million. The uptick can be attributed to a number of Bombardier, Embraer and Dassault programs along with new commercial aircraft programs.
Space and Defense: Net sales rose 9.3% year over year to $90.4 million, primarily owing to growth across a number of military, rotorcraft and space programs.
Industrial: Net sales surged 37% year over year to $77 million, driven by high wind energy sales.
Hexcel Corporation Price, Consensus and EPS Surprise
As of Sep 30, 2018, cash and cash equivalents were $47.2 million compared with $60.1 million as of Dec 31, 2017.
Long-term debt totaled $980.7 million as of Sep 30, 2018, up from $805.6 million as of Dec 31, 2017.
At the end of the third quarter, cash generated from operating activities summed $278.4 million compared with $308.5 million in the year-ago period.
The effective tax rate for the quarter was 9.1% compared with 16.5% in the third quarter of 2017. The company used $102 million to repurchase shares of its common stock during the third quarter of 2018. The remaining authorization under the share repurchase program on Sep 30, 2018 was $460 million.
2018 Guidance
Management narrowed its 2018 guidance. The company currently expects 2018 sales to be in the range of $2.14-$2.20 billion, compared to prior guidance band of $2.10-$2.20 billion. Moreover, it currently projects adjusted earnings per share to be in the range of $2.99-$3.07, compared to earlier range of $2.96-$3.10.
However, Hexcel continues to forecast its free cash flow to exceed $230 million and accrual basis capital expenditures to remain between $170 million and $190 million, in 2018.
Textron Inc. (TXT - Free Report) reported third-quarter 2018 adjusted earnings from continuing operations of 61 cents per share, which missed the Zacks Consensus Estimate of 76 cents by 19.7%.
AAR Corp. (AIR - Free Report) reported first-quarter fiscal 2019 adjusted earnings of 54 cents per share, which surpassed the Zacks Consensus Estimate of 52 cents by 3.9%.
Upcoming Defense Releases
L3 Technologies is expected to report third-quarter 2018 results on Oct 25. The company has an Earnings ESP of +8.05% and a Zacks Rank #2.
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Hexcel (HXL) Q3 Earnings Match Estimates, Revenues Miss
Hexcel Corporation (HXL - Free Report) reported third-quarter 2018 adjusted earnings of 80 cents per share, which came in line with the Zacks Consensus Estimate. The bottom line improved 12.7% from the prior-year quarter’s figure of 71 cents.
In the reported quarter, the company’s GAAP earnings came in at 91 cents compared with the year-ago quarter’s figure of 76 cents.
Total Revenues
The company’s net sales totaled $540.5 million, which missed the Zacks Consensus Estimate of $544 million by 0.6%. However, the top line witnessed an increase of 10% from the year-ago quarter’s figure of $491.5 million.
Operational Update
Hexcel's gross margin was 26.5% in the third quarter, reflecting a contraction of 110 basis points year over year.
The company’s operating expenses amounted to $46.5 million in the quarter, which came in line with the year-ago quarter’s operating expenses. Selling, general and administrative expenses were down by 6%, while research and technology expenses were up 17.8 %.
Quarterly Performance
Commercial Aerospace: Net sales were up 5.8% year over year to $373.1 million. The uptick can be attributed to a number of Bombardier, Embraer and Dassault programs along with new commercial aircraft programs.
Space and Defense: Net sales rose 9.3% year over year to $90.4 million, primarily owing to growth across a number of military, rotorcraft and space programs.
Industrial: Net sales surged 37% year over year to $77 million, driven by high wind energy sales.
Hexcel Corporation Price, Consensus and EPS Surprise
Hexcel Corporation Price, Consensus and EPS Surprise | Hexcel Corporation Quote
Financial Details
As of Sep 30, 2018, cash and cash equivalents were $47.2 million compared with $60.1 million as of Dec 31, 2017.
Long-term debt totaled $980.7 million as of Sep 30, 2018, up from $805.6 million as of Dec 31, 2017.
At the end of the third quarter, cash generated from operating activities summed $278.4 million compared with $308.5 million in the year-ago period.
The effective tax rate for the quarter was 9.1% compared with 16.5% in the third quarter of 2017. The company used $102 million to repurchase shares of its common stock during the third quarter of 2018. The remaining
authorization under the share repurchase program on Sep 30, 2018 was $460 million.
2018 Guidance
Management narrowed its 2018 guidance. The company currently expects 2018 sales to be in the range of $2.14-$2.20 billion, compared to prior guidance band of $2.10-$2.20 billion. Moreover, it currently projects adjusted earnings per share to be in the range of $2.99-$3.07, compared to earlier range of $2.96-$3.10.
However, Hexcel continues to forecast its free cash flow to exceed $230 million and accrual basis capital expenditures to remain between $170 million and $190 million, in 2018.
Zacks Rank
Hexcel currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Textron Inc. (TXT - Free Report) reported third-quarter 2018 adjusted earnings from continuing operations of 61 cents per share, which missed the Zacks Consensus Estimate of 76 cents by 19.7%.
AAR Corp. (AIR - Free Report) reported first-quarter fiscal 2019 adjusted earnings of 54 cents per share, which surpassed the Zacks Consensus Estimate of 52 cents by 3.9%.
Upcoming Defense Releases
L3 Technologies is expected to report third-quarter 2018 results on Oct 25. The company has an Earnings ESP of +8.05% and a Zacks Rank #2.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>